A Queensland supermarket is offering cash discounts for customers digging out their notes and coins, in a quiet but costly protest against the new card surcharge ban.
Since October 1, Australian merchants can no longer pass the cost of accepting a card payment directly onto customers in the form of a surcharge.
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However, businesses are still on the hook for card acceptance costs. To avoid paying those fees, some merchants are asking customers to pay the old-fashioned way.
Josh Williams, director of Forrest Beach Supermarket, told SmartCompany the Far North Queensland grocery store is encouraging customers to use cash wherever possible.
The business is now offering a 2% discount for cash transactions, a policy Williams said has resulted in cash purchases rising by 30% since the surcharge ban kicked in.
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The supermarket has given more than $385 back to cash-paying customers in the form of a discount.
That 2% discount is actually greater than the average 1.5% fee the supermarket pays each time it accepts card, meaning the business loses a fraction of its potential margin through each cash sale.
Nevertheless, Williams hopes Forrest Beach Supermarket’s decision will inspire other businesses to consider their own cash discounts.
“That’s just my business. What happens if other business started doing that?” he said.
“What strain does it put on the banking world?”
While many Forrest Beach Supermarket customers are happy to pay cash, the business will still accept cards, with Williams saying banning cards altogether would have devastating consequences for the business.
The supermarket has adjusted shelf pricing to compensate for the surcharge ban.
Even so, absorbing those card acceptance fees is “just brutal”, Williams said.
“After the rising cost of power, all the wage increases, rent, interest rates, the works, the net margins are in the single digits, mate.”
Other businesses offering discounts
Forrest Beach Supermarket is not the only business to begin offering cash discounts.
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In Tasmania, Hazelbrae Hazelnuts says it will also offer cash discounts that are bigger than what it pays in card acceptance fees.
“Not because we can afford it – we can’t,” the business said, in posts on Facebook and Instagram on Saturday.
“If you get our emails you will know this is a particularly tough year for us.
“But why should banks and payment facilities get so much of it?”
Chappy’s Place, a cafe in Kadina, South Australia, has also extended a 5% cash discount to customers.
“Credit/debit cards are welcome but impose extra costs on small businesses which will drive up prices in the long-term,” the small business told Facebook followers last Tuesday.
Like Forrest Beach Supermarket, some other businesses say their cash transaction rates have noticeably increased since then October 1 surcharge ban — even without cash discounts on offer.
2 Chefs Cafe Thornton, located in the Maitland region of New South Wales, says its cash transaction rates have more than doubled from 12% to 25% over the first week of the surcharge ban.
Looking to the long-term
Cash usage rates had plummeted in Australia in the past two decades.
Reserve Bank of Australia (RBA) data shows 97% of Australians used cash in a typical week in 2007, which steadily fell to 47% in 2022.
But rates rose slightly, to 50%, in 2025.
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Some academics believe the surcharge ban — devised by the RBA itself — could spark increased cash usage.
Dr. Marian Makkar, associate professor of Marketing at RMIT University, said the ban may cause a “psychological shift” among customers.
“With surcharges no longer visible on receipts and prices rising across retailers to absorb payment processing costs, consumers are reverting to cash as their preferred payment method, forcing a more deliberate and intentional spending mindset,” she wrote last week.
For now, Williams said it was too early to tell if the cash payment uptick at his business will carry on for the long-term.
“We don’t have a big enough sample size,” he said.
“It’s easy to say our cash sales are up 30% for for the first week, since I’ve been getting the word out there.
“Will they die down? I hope not.”